New Zealand – Follow-up on GST proposals for bodies corporate

June 2014 – The Inland Revenue Department has released guidance addressing how it will approach to the government’s announcement that the law will be amended retroactively from 6 June 2014 to remove goods and services tax (GST) registered bodies corporate from the GST rules.

In general, if a body corporate is already GST-registered (and not voluntarily) it will need to continue charging GST on supplies, and filing returns. The GST paid will be refunded when the law is changed.

Similarly, a body corporate can continue to claim GST refunds, but with the provision that these will need to be repaid when the law changes. The Inland Revenue’s operational statement does not rule out the possibility of use of money interest or penalties applying.

Following Portugal’s successful exit last month from its bail out, it has announced a standard VAT rate increase from 23% to 23.25% on 1 January 2015. Portugal still has to hit the demanding Euro-currency deficit target of 3% of GDP, so every little counts.

The “mini one-stop shop” regime

The new rules could require service providers to register as VAT payers in all EU Member States in which they supply their services. To prevent an additional administrative burden on businesses, the scope of the VAT “mini one-stop shop” regime would be expanded. Suppliers of services would be able to comply with their obligation to declare and pay VAT (attributable to the individual EU member states of consumption) by means of one VAT return that is submitted electronically via a web portal in their EU Member State of identification. This VAT return, along with the amount of VAT paid, would then be transmitted by the EU Member State corresponding to the place of consumption (i.e., the EU Member State entitled to receive this VAT payment).

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